Russian Federation : Financial Sector Stability Assessment Update

This paper presents the Financial Sector Stability Assessment Update on the Russian Federation. Indicators of bank soundness and performance are broadly favorable but credit risk poses a challenge over the medium term, and capitalization should rise to support continued banking sector development. The system has weathered the global credit crunch that began in mid-2007, yet the funding model is coming under strain as the turmoil in global markets continues. Capital markets have grown dramatically in recent years but remain highly concentrated.